Correlation Between Franklin Federal and Deutsche Multi-asset
Can any of the company-specific risk be diversified away by investing in both Franklin Federal and Deutsche Multi-asset at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Federal and Deutsche Multi-asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Federal Limited Term and Deutsche Multi Asset Moderate, you can compare the effects of market volatilities on Franklin Federal and Deutsche Multi-asset and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Federal with a short position of Deutsche Multi-asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Federal and Deutsche Multi-asset.
Diversification Opportunities for Franklin Federal and Deutsche Multi-asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FRANKLIN and Deutsche is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Federal Limited Term and Deutsche Multi Asset Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Multi Asset and Franklin Federal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Federal Limited Term are associated (or correlated) with Deutsche Multi-asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Multi Asset has no effect on the direction of Franklin Federal i.e., Franklin Federal and Deutsche Multi-asset go up and down completely randomly.
Pair Corralation between Franklin Federal and Deutsche Multi-asset
Assuming the 90 days horizon Franklin Federal is expected to generate 7.85 times less return on investment than Deutsche Multi-asset. But when comparing it to its historical volatility, Franklin Federal Limited Term is 3.54 times less risky than Deutsche Multi-asset. It trades about 0.16 of its potential returns per unit of risk. Deutsche Multi Asset Moderate is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Deutsche Multi Asset Moderate on September 4, 2024 and sell it today you would earn a total of 31.00 from holding Deutsche Multi Asset Moderate or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Federal Limited Term vs. Deutsche Multi Asset Moderate
Performance |
| Timeline |
| Franklin Federal Lim |
| Deutsche Multi Asset |
Franklin Federal and Deutsche Multi-asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Federal and Deutsche Multi-asset
The main advantage of trading using opposite Franklin Federal and Deutsche Multi-asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Federal position performs unexpectedly, Deutsche Multi-asset can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Deutsche Multi-asset will offset losses from the drop in Deutsche Multi-asset's long position.| Franklin Federal vs. Franklin Mutual Beacon | Franklin Federal vs. Franklin Mutual Global | Franklin Federal vs. Franklin Mutual Global | Franklin Federal vs. Templeton Foreign Fund |
| Deutsche Multi-asset vs. Qs Small Capitalization | Deutsche Multi-asset vs. Small Cap Value | Deutsche Multi-asset vs. Champlain Small | Deutsche Multi-asset vs. Small Midcap Dividend Income |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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